Long Shot: Cash Is King

By

Gary Dvorchak

| Jan 23, 2013 | 10:30 AM EST

Real Money's Long Shot column is dedicated to trading ideas that are highly risky, but which present an opportunity for significant payoff if they work. Such ideas are sometimes characterized as "lottery tickets" and are for only the most risk-tolerant investors, as the potential for 100% loss is high.

In a recent "Long Shot" post, I pointed out a promising name trading below cash value but poised to soar if a new business model eliminates cash burn. Because UTStarcom (UTSI) is a Chinese company, no one believes its numbers (and Tuesday's Caterpillar (CAT) news does nothing to burnish the reputation of Chinese companies), but I suspect UTSI is for real, and if new management pursues a new strategy to return cash flow to breakeven, the stock will move. Stocks trading below cash value are a great place to troll for trading ideas. The market is telling you they are going out of business, so the slightest whiff of success can send shares soaring....200 more words left in this article. To read them, just click below and try Real Money FREE for 14 days.

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